[Click eStock] "Hanssem, Market Expansion Paradoxically Due to Reconstruction Regulations... Target Price Up"

[Asia Economy Reporter Eunmo Koo] KB Securities evaluated Hanssem as experiencing a paradoxical market expansion due to reconstruction regulations and expects structural growth despite a decrease in housing sales volume. The investment opinion was maintained as ‘Buy,’ and the target price was raised to 125,000 KRW.

Jang Moonjun, a researcher at KB Securities, estimated in a report on the 24th that the remodeling market accessible to Hanssem has expanded by 20-30% compared to before due to the government’s strengthened reconstruction regulation policy. Researcher Jang stated, “The reason for recommending a buy despite the potential decrease in housing sales volume in the second half of the year is that if the interior division’s performance recovers in 2020 and long-term growth centered on Rehouse’s performance is added, a meaningful stock re-rating could be possible.”

Hanssem’s consolidated sales for the third quarter of this year are estimated to have reached 489.7 billion KRW, a 19.3% increase compared to the same period last year, and operating profit increased by 214.3% to 22.4 billion KRW, meeting market expectations. Researcher Jang noted, “Although B2B sales are sluggish, the growth trend of online and offline interior channels continues, and Rehouse is showing a steady trend,” adding, “It is noteworthy that Hanssem is expected to show favorable performance even though the third quarter is generally classified as an off-season.” He also estimated the Chinese subsidiary’s operating loss this quarter at 1.5 billion KRW and predicted that the break-even point could be achieved within 2021.

The performance trend of Rehouse is considered more important than short-term results. Researcher Jang analyzed, “This year’s favorable performance is largely due to the unexpected strong performance in the interior division caused by the spread of COVID-19,” and added, “For the strong performance to continue in the future, meaningful growth in Rehouse, not just interior, must be achieved.” He said, “Hanssem is focusing on establishing a quality assurance system for future mass construction of Rehouse,” and added, “As the remodeling market is likely to expand, if mass construction can proceed smoothly, rapid growth will naturally follow.”

This content was produced with the assistance of AI translation services.